Brookfield Property Partners loses US$2 billion on pandemic fallout

Brookfield Property Partners LP posted a us$2-billion loss as the fallout from the COVID-19 pandemic caused it to reassess the value of its real estate.

The loss last year compares with us$3.2 billion in net income for 2019, a decline the firm attributed primarily to “unrealized reductions of values of certain assets within the portfolio,” according to a statement Tuesday.

Funds from operations, a measure of cash flow for real estate companies, were down about 18 per cent to us$540 million for the company’s portfolio of office buildings, while FFO from retail properties fell 29 per cent last year to us$550 million, according to the statement.

The pandemic kept many offices and malls around the world empty for large portions of last year, while also accelerating changes to how people work and shop. The success of remote working during the pandemic has many companies examining how much office space they need, while stay-at-home orders have pushed broader adoption of e-commerce at the expense of brick-andmortar retail.

Amid this pressure, brookfield Property Partners’ corporate parent, brookfield Asset Management Inc., has proposed taking the firm private by acquiring the shares it doesn’t already own for us$5.9 billion, or us$16.50 a share.

The company’s shares have gained 18 per cent this year, closing Tuesday at us$17.29, up 1.2 per cent.